Editorial: Confidential Campbell’s Corner Deal

Filed in Just In, Opinions by January 16, 2020

COUNCIL’S purchase of the Campbell’s Corner building was one of the worst kept secrets in town.

scone.com.au sought confirmation from Council on the proposed purchase throughout last year, but no response was provided.

The purchase of the building may be a great decision, to ensure an iconic building at the heart of the town is preserved or a bad business decision underpinned by rate payer money, but unfortunately the ratepayers were not consulted in relation to the purchase and the matter was decided by Council behind closed doors.

The confidential sale of the old Council chambers in 2015, which housed the Scone library, generated a significant community outcry due to the lack of a fair tender process for purchase and community consultation.

Campbell’s Corner has been purchased by the Upper Hunter Shire Council for $3million.

The decision to purchase Campbell’s Corner, which will become the new home for the library, was also done confidentially, an approach challenged by Daryl Dutton, former general manager of the Council, last year.

Mr Dutton flagged the purchase may be in breach of mandatory Local Government requirements for capital expenditure by not consulting the community, when the expense exceeds 10 percent of rate revenue, which he estimated to be $1.1million. (Read: Letter: No Confidence in Council Compliance).

The Council today confirmed the building was purchased for $3 million, will require $1.8 million for initial renovations and will require a loan of $3.5 million. 

Previous Council’s have considered buying the building, however did not proceed because they felt they could not justify using ratepayers money to upgrade and maintain the large heritage building.

The considerations for this Council purchasing the building are unknown, because it was one of a plethora of asset purchases kept confidential from ratepayers (Read: What Has Council Confidentially Purchased?)

Elizabeth Flaherty, editor of scone.com.au. Photo: Amanda Gaffney-Ray.

In Council’s statement today, it confirmed negotiations for the purchase began in January 2018 and was discussed confidentially at Council meetings in July and October last year. (See statement at the end of the story)

In the October Council meeting, there was a notable confidential asset purchase, where Mayor Wayne Bedggood and Cr Maurice Collison changed their votes to to oppose the purchase, but the purchase was passed by one vote and the reasons for their back flip are still unknown.

At a minimum, once a sale has been processed, Council must disclose all information relating to the sale on the public record, including considerations for the purchase and how each Councillor voted, which has not happened.

Council’s consistent pattern of non-disclosure drew concern from the Office of Local Government last year (Read: Letter: Council Culture of Secrecy Confirmed) and breached Local Government law, by using $380,000 from restricted funds, without approval by the Minister (Read: Council Broke Law with $380,000 Misappropriation).

scone.com.au has asked Council when the information will be made publicly available and requested a copy of the KPMG report.

Growing up in Scone I remember when Campbell’s Corner was the heart of the main street, housing the supermarket and being the focal point during Christmas with festivities spilling out into the old car park and I hope it once again becomes the hub in the new main street, filled with local retailers.

But, it is a shame the vision has not be shared prior to purchase with the ratepayers, who were then able to decide if it is a priority worth financially supporting.

Elizabeth Flaherty

 

 

Editor
scone.com.au

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In today’s announcement Council stated the following in relation to their purchase process:

The decision to negotiate to purchase the building – subject to due diligence and Office of Local Government Capital Expenditure Review – now completed – was made by a majority of Councillors at the January 2018 Ordinary Council Meeting, and confirmed at the July 2019 and October 2019 meetings. These were closed meetings as the negotiations were commercial-in–confidence.

Council’s current Operational Plan 2019/20 lists an action to “investigate options for the development of a new library in Scone” and includes the purchase of a building in Council’s budget.

A Due Diligence Review including financial, building, zoning, tenancy and insurance assessments was conducted by external consultants, Prosper Group. The technical report on the state of the building and required repairs, was conducted by KPMG.

A Capital Expenditure Review was submitted to the Office of Local Government (OLG) for review, and approved. The key financial and due diligence information, in particular estimated rectification costs, is available on Council’s website.

There are currently several commercial vacancies in Campbell’s Corner which Council will be seeking to fill.

There is a total lettable area of 2680m2 (or 75%) including a ground floor with ten shop spaces, common areas and amenities, and an expansive second storey with two current tenancies. There is also a vacant basement space and 63 space car park and loading dock.

 

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